The IRS Launches Direct File, a Pilot Program For Free Online Tax Filing Available in 12 States (apnews.com) 56
After weeks of testing, an electronic system for filing returns directly to the IRS is now available for taxpayers from 12 selected states. From a report: The new system, called Direct File, is a free online tool. Taxpayers in the selected states who have very simple W-2s and claim a standard deduction may be eligible to use it this tax season to file their federal income taxes. The program will also offer a Spanish version, which will be available starting at 1 p.m. Eastern Time on Tuesday. The Treasury Department estimates that one-third of all federal income tax returns filed could be prepared using Direct File and that 19 million taxpayers may be eligible to use the tool this tax season.
"Direct File will offer millions of Americans a free and simple way to file their taxes, with no expensive and unnecessary filing fees and no upselling, putting hundreds of dollars back in the pocket of working families each year, consistent with President Biden's pledge to lower costs," said National Economic Advisor Lael Brainard. Certain taxpayers in Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, Arizona, Massachusetts, California and New York can participate. Direct File can only be used to file federal income taxes, taxpayers from states that require filing state taxes will need to do so separately.
"Direct File will offer millions of Americans a free and simple way to file their taxes, with no expensive and unnecessary filing fees and no upselling, putting hundreds of dollars back in the pocket of working families each year, consistent with President Biden's pledge to lower costs," said National Economic Advisor Lael Brainard. Certain taxpayers in Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, Arizona, Massachusetts, California and New York can participate. Direct File can only be used to file federal income taxes, taxpayers from states that require filing state taxes will need to do so separately.
We welcome America (Score:2, Informative)
to the 21st century.
Wait "federal" ? Does this mean you need to file state taxes separately!?
I hear in some countries, people don't even need to file tax returns. You just give your tax file number to employer, bank, investment fund etc, and it is all done automatically.
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Wait "federal" ? Does this mean you need to file state taxes separately!?
Burn. You seem to know us too well.
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to the 21st century. Wait "federal" ? Does this mean you need to file state taxes separately!? I hear in some countries, people don't even need to file tax returns. You just give your tax file number to employer, bank, investment fund etc, and it is all done automatically.
That's nice. Yes, we here in the hinterlands we have Federal, State, local, and school taxes.
I take it in these more advanced countries, you know exactly where your tax dollars go? With no filing needed, it must go everywhere needed Automagically, and you have no need to know who gets what.
What amazes me is that the US tax system is soooo onerous to some - It's about as simple as can be. Yes, some complain how hard it is, but that's a them problem.
Just a question - if you want to know where the
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I know how much the feds get, the state, the local, the schools - down to the penny.
Not really. The feds turn around and give a bunch of money straight to the states, and most states give a bunch of money directly to schools and localities.
But how is what size of entity gets money important anyway? In all cases, the money is divided up and doled out to countless individual programs. *That's* what's important, and our system gives you no particular clues to track that.
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Not really 80% of federal tax money goes to military, social security repayments and medicare repayments.
If we stopped all other things the budget would still be in defecit spending. Trumps tax cuts gutted any hope of collecting enough money to pay debts.
Basically we need to raise taxes on the wealthy and cut spending in lots of areas and cut social secuorty and maybe we can get ahead of of the debt in 20-40 years.
No republican will do that and democrats only get started and then get spendy.
Re: We welcome America (Score:2)
State sales taxes are automatically charged by the retailer on every purchase - city sales taxes as well in some jurisdictions.
How do you even know how much money is going to the merchant vs state taxes vs city taxes? Its clearly impossible... its not like they give you an itemized receipt with the details down to the penny...
Have you ever paid a mortgage that includes property taxes? Insurance? Escrow?
Re:We welcome America (Score:4, Informative)
What amazes me is that the US tax system is soooo onerous to some - It's about as simple as can be.
"Onerous" isn't really the word I would choose. "Stuipid", "Overcomplicated", "Intentionally Obscure" possibly. The only reason I'm less ornery about it lately is I found a tax service that allows me to fill out and file with a Schedule C and doesn't bump me up to the $150 "premium" package to do so.
But your "as simple as can be" has to be a joke. The example provided by OP sounds infinitely simpler than what we have to do.
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""Overcomplicated", "Intentionally Obscure" "
I definitely have no argument with those. The stupid is mostly because Congress can't resist using the tax code to do social engineering.
I can't speak about Schedule C, but form 2210 and Schedule AI are terrors, and all because the IRS wants their cut every quarter even when your income is extremely irregular. Even if by the end of the year you might have paid them every dollar due, you have to prove you did not cheat them during any particular quarter.
Also, to p
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You seem to be confusing the supply side and spending side of tax dollars. Most of the world doesn't give a flying fuck where their tax dollars go. That's a problem for the government and not for your tax return.
Why you concern yourself doing the governments job for them is beyond me. Yes I am like what the OP described. My tax return is completely pre-filled, and yet somehow it includes my local, state, and federal taxable obligations all without bothering me about it. The only thing I do on my tax return
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What amazes me is that the US tax system is soooo onerous to some - It's about as simple as can be. Yes, some complain how hard it is, but that's a them problem.
I take it you haven't had a complicated tax event yet, like owning a business with employees, shares in a startup becoming liquid, or selling a business. I've had both, and I can tell you, it is absolutely mystifying. I had rival CPAs claiming different opinions on what was taxable, lawyers chiming in to differ, and then after achieving consensus getting a letter a year later from the IRS that I underpaid about $2k (out of millions). It cost about $30k just to file my taxes and pay these CPAs in those c
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Here's an example from the country I live in (Italy), where we had online tax filing since over a decade.
Most fields are already filled-in, since your employer already deducts taxation from your salary and pays it in your stead.
You can confirm the pre-filled values, or modify them if something is off. I haven't had to touch anything for the last 7 years now, the system is very precise.
Tax declarations are itemized and you can clearly see how much goes to the state, and how much to the local institutions.
Ded
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in (Italy), ... School taxes are paid only if you have children that attend, ... Municipal services ... based on how many members your family has,
Wow, I wonder how wise that is, given Italy now has one of the lowest fertility rates in the world. Shouldn't the tax system be incentivising more births?
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There are deductibles and direct economic support for families with children, up to 21 years old (no age limit if the children have disabilities).
https://www.inps.it/en/en.info... [www.inps.it]
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In my area, you have to file federal, state and city taxes separately. In my case, I work in one city and live in another (only about 1km away) and get to file taxes in two cities!
You can file on Linux - that's an improvement (Score:3)
I did a quick search and TurboTax doesn't run on Linux or BSD, so it's like Americans were expected to pay taxes not only to the government, but to Intuit, and to Apple or Microsoft as well.
Direct File is online.
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Yes, but you've always had to do that. They are (and always have been) two separate sets of forms sent to different addresses. The fact that you may have used some service or accountant in the past who filed your federal and state taxes on your behalf is just part of the convenience of the service they offer.
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Yeah, in Brazil you have a free, official IRS app (there's an online version too) to fill the taxes for some 30 years now. It is still a bit of a pain, but it is improving each year, with most of the information being pre-filled.
So you only have to review it or fill some things which aren't automatically reported yet. Even with lots of different investments, I've been able to fill it by myself in just a couple of hours.
Also, we don't have to fill state or city income taxes. After the IRS collection, the fed
Key Features? (Score:3)
Can it complete with the commercial applications, like Turbo Tax? Will it try and upsell you every other page? Will it nag you to share your information so they can market other for-profit products to you?
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Can it complete with the commercial applications, like Turbo Tax? Will it try and upsell you every other page? Will it nag you to share your information so they can market other for-profit products to you?
I use Turbo Tax, I make too much for the IRS free app, so I think the answer is no, free filing doesn't compete at all after a certain point. Turbo Tax doesn't try to upsell you at every other page - not sure who does. For TT's upselling and info sharing, you just say "no". I'll note that one of the "upsells" is some small amount extra to file your State Taxes as well, so I do accept that.
As I noted to another, for the price, Turbo Tax is pretty convenient. I used to fill out mine manually, and it isn'
Re: Key Features? (Score:4, Informative)
Which version of turbo tax are you using? And how did you travel back in time ten years to use it?
TT constantly tries to upsell if you are on basic - blatantly with the full page advert at least 2x but also with every section with more targeted offers of features / live support.
I'd still use it since it has the features I need to avoid losing a day on tax paperwork l, and its still less annoying than the alternatives. But their reputation for misleading upsell is well deserved.
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The online version. It will try an upsell you to Audit Defense, Max, and other bits several times during the filing process. At one point it flat out asks you to share your tax information to better market financial products to you by their partners.
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I've used TurboTax for the past 20 years but they went a bit too far this year. In the EULA for TurboTax:
You understand that by using certain Services, you are providing written instructions in accordance with the Fair Credit Reporting Act and other applicable law to permit Intuit Inc. and its affiliated companies to obtain and periodically refresh your credit information and other information about you from third parties for marketing, eligibility, and other purposes described in Intuit's Global Privacy Statement . You understand that your instructions authorize Intuit and its affiliated companies to obtain such information now and periodically in the future for as long as you have a registered Intuit account. We will stop refreshing your credit information when you cancel your account through your account settings. https://turbotax.intuit.com/co... [intuit.com]
(emphasis added by me for clarity)
So having an Intuit account gives them permission to pull your credit rating for marketing purposes for as long as you have an account. This wasn't a problem before this year as you could use TurboTax without creating a registered Intuit account.
Starting this year, to use TurboTax you must create an Intuit account in order to register and activate the software. Intuit
Not complete yet (Score:2)
This is an initial, limited rollout for simple returns.
It is far from complete. Either my schedule C or E income would present me from using it, for example.
If successful, it is expected to handle increasingly complex returns as time goes on.
Requires ID.me (Score:5, Interesting)
Re:Requires ID.me (Score:5, Interesting)
Anyone interfacing much with government employees using government systems are required to have an authentication account with login.gov. I can't imagine ID.me is much different. I think the government knows how to manage Accessible authentication systems. Even the Feds themselves go through such authentication.
Disclaimer: I've developed applications using those APIs.
The IRS is kinda going slow now, having progressed to get to this point. That's why only 12 cooperative states can use this option now -- this is a work in progress. Everyone remembers the healthcare.gov initial rollout and subsequent course-correction. This is real progress under the Biden administration.
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In addition to seeming being a somewhat too little too late offering on their part, they also require ID.me service to file. The service requires you to upload a video of yourself or do a video call, and their software magically can tell if you are the same person on your drivers license or not. I don't know how well this works, but there's nightmare stories on YouTube of people using this service.
I believe there is an upper limit on the free filing as well - for the assisted filing. $79,000 for what they call "Adjusted income". You can always download and fill out the forms manually for free.
I use Turbotax now and pay the piper, mainly because it is convenient and quick. I used to do them myself, but meh, they do things pretty automagically, and the whole federal and state taxes are finished and submitted in maybe two hours.
I'm not sure what people are whining about with upselling. We're allowe
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It works, I did it. It is not quick, and requires a number of steps, but this may be a good thing. Something that verifies your identity to get to your data should be robust.
Income limit? (Score:1)
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To be fair, the majority of folks above that income are likely to not meet other requirements - aka having investment income, too much in interest income or not doing the standard deduction, so its more than just that.
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I don't know. I went through and had to stop at page 7 of the requirements
** Made contributions to a retirement plan
** Had college tuition or other higher education expenses
That said, it's new and hopefully will cover more options next year.
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nope (Score:2)
As long as I have to fill stuff in over the internet to them, it is a loser. I want to fill it in on my own machine, then upload it to them. For a simple return, this is trivial with a pdf that contains form fields.
Utter madness (Score:2)
How can parasitic companies like Intuit compete with free? And the next thing you'll know the IRS will deduct taxes at source so many people won't even have to file a return. What socialist madness is that?
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How can parasitic companies like Intuit compete with free?
Sounds like you've never used government software.
And the next thing you'll know the IRS will deduct taxes at source so many people won't even have to file a return.
Free is relative, the IRS is saying the software will cost them up to almost $250 Million [reuters.com] just to operate; how many tens of millions did they take to study and create this alternative to the already freely available options?
What socialist madness is that?
The kind where money is wasted unproductively, the standard kind.
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Thanks I use government software all the time. Here in Ireland, I go onto the revenue website if I want a relief from something (e.g. waste collection charges). I certainly don't file returns because my wages are taxed at source. Like 90% of other people. Consequently revenue doesn't need to employ armies of tax inspectors because the kinds of fraud that are possible are relatively easy to focus on.
Secondly, objecting to $250 million spent on a website compared to what people pay annually on accountants and
Fuck Intuit (Score:2)
And their bait n switch tactics! They kept fucking around with taxpayers and promising that they'd make free-file easy and accessible, only to go back on their promises. I, for one, will be happy to see their revenue dry up.
Free File (Score:2)
Don't confuse this with "Free File Fillable Forms". Fillable Forms is very manual, but if you can do a paper return you can do this. It will allow you to e-file.
Some states also use this, at least Oregon does.